Special Guest Star Chair
Linda Schilling (École Polytechnique, CREST, and CEPR), Jesús Fernández-Villaverde (University of Pennsylvania, NBER, and CEPR), Harald Uhlig (University of Chicago, CEPR, and NBER)
With the introduction of a central bank digital currency, or CBDC, a central bank is forced to confront a classic issue in banking: the tension between providing a liquid means of payment and the desirable level of maturity transformation. We analyze this issue in a nominal version of a Diamond and Dybvig (1983) model, where the central bank additionally has a price stability objective. While the central bank can always deliver on its nominal obligations, runs can nonetheless occur, manifesting themselves either as an excessive real asset liquidation or as a failure to maintain price stability. Thus, we demonstrate an impossibility result that we call the CBDC trilemma: of the three goals of efficiency, financial stability (i.e., absence of runs), and price stability, the central bank can achieve at most two.
Yunwen He (Tsinghua University) / Jaimie W. Lien (The Chinese University of Hong Kong (CUHK)) / Jie Zheng (Tsinghua University)
Collective knowledge is significantly affected by information about others’ viewpoints. However, under what conditions does the “wisdom of crowds” help versus harm knowledge of factual information? In this experiment, we present subjects with the task of answering 50 factual true or false trivia questions, with the potential opportunity to revise their answers after receiving different levels of information about other subjects’ answers and self-assessed confidence levels from an independent session. We find that information about others’ answers improves performance on easy questions, but tends to harm performance on difficult questions. In addition, information about answers provided by other subjects mainly improves performance for those with lower initial knowledge levels. Subjects in our Moderate-Information condition outperform those in either the Low or High-Information conditions, implying an optimal level of social information provision, in which the Majority Rule and Maximum Confidence rule complement one another. Although the Maximum Confidence rule can improve performance, yielding the lowest overall error rate out of the heuristics considered, subjects generally underutilize the information on other subjects’ confidence levels in favor of the Majority Rule heuristic. These findings shed light on possible directions for policies that can cultivate factual knowledge on online opinion platforms.
Iftekhar Hasan (Fordham University) / Boreum Kwak (IWH Halle) / Xiang Li (IWH Halle)
This study investigates whether and how financial technologies (FinTech) influence the effectiveness of monetary policy transmission. We use an interacted panel vector autoregression model to explore how the effects of monetary policy shocks change with regional-level FinTech adoption. Results indicate that FinTech adoption generally mitigates monetary policy transmission to real GDP, consumer prices, bank loans, and housing prices. A subcategorical analysis shows that the muted transmission is the most pronounced in the adoption of FinTech payment and credit, compared to that of insurance. The regulatory arbitrage and competition between FinTech and banks are the possible mechanisms leading a mitigated monetary policy transmission.
Jarko Fidrmuc / Philipp Reichle / Fabian Reck (Zeppelin University)
A heated debate has emerged drawing a connection between housing affordability and home-sharing platforms such as Airbnb. Despite first regulatory efforts by municipalities, the impact on rents and house prices has been examined insufficiently in scientific literature, especially with regards to Europe. Therefore, this paper addresses this gap by analyzing data on Airbnb listings for 25 European cities between 2010 and 2019. Using fixed effects and dynamic panel regressions, we show that home-sharing has significantly contributed to a rise in rents and house prices in European cities. While these effects are mainly concentrated in city centers, we also document smaller effects in other urban districts. Finally, the recent home-sharing regulations are not associated significantly with housing affordability.